1. BEWARE THE FAR BAR SHORT SALE ADDENDUM!
The existing FAR/BAR short sale addendum is deficient in many respects but one section in particular poses real risks for real estate agents ad brokers who encourage their clients to sign the addendum as part of a sales contract. Due to a glaring oversight in the language contained within the addendum, a situation could develop that will guarantee you will be faced with an unhappy client. In the worst case scenario, you could be subject to a complaint or litigation! Don’t sign another acceptance until you find out what this crucial problem is!
2. BEWARE THE SHORT SALE ” FLIP” TRANSACTION!
It’s no secret that the only real action in this challenging economic environment are short sale transactions. Many agents are either knowingly or unknowingly getting involved in ” flip” transactions where a second transaction for a higher price is on the table immediately behind the first transaction. You need to be aware that in most cases, these transactions are fraught with liability for all parties involved and as the licensed professional, you’ve got the most to lose.
3. BEWARE OF PROVIDING YOUR CLIENTS LEGAL ADVICE!
If a client is behind on his mortgage they will look to you for advice. Should they stop paying? What are the consequences of not paying or of a short sale? What should they do if they get served with foreclosure? You risk serious consequences for attempting to answer any of these questions and you will almost certainly be subject to liability if anything goes wrong. Don’t make the mistake of crossing the line between trusted sales advisor and providing legal advice. It complicates and interferes with the relationship you have worked to build and may work against getting your deal closed.
4. CLIENTS IN FORECLOSURE ABSOLUTELY MUST HIRE AN ATTORNEY!
So you’ve got a listing that you’ve been working on for days, weeks or months and you find out a foreclosure case has been filed against them”¦what should you do? The most important thing you can do to protect your client’s interest in the property and your interest in the closing is to insist that your client hire an attorney. Even if you’ve got a contract on the table or feel like you can get the home sold before a foreclosure sale occurs, you cannot risk the possibility that this might not happen. Only an attorney properly licensed in the state can represent your client and the most effective attorney is one who practices before the local judges all the time.
5. BEWARE OF LOSS MITIGATORS, ” SHORT SALE EXPERTS” AND OTHERS
Florida’s Foreclosure Rescue Fraud Act makes it a crime and subjects parties to fines of up to $25,000 for any party who takes any money or who engages in virtually any activity on behalf of a homeowner who is in foreclosure. This law is very broad and applies to just about every conceivable interaction with a homeowner in foreclosure. Don’t risk getting drawn into the wave of prosecutions and enforcement actions that are coming”¦carefully consider any party involved in your transactions and do not associate with parties who may be violating the Act.
These are tough and challenging times for everyone”¦protect yourself and your clients”¦work with an attorney who knows how to do both!